We are all ‘up to here’ in accommodating COVID-19, and depending on our tolerance levels, this is likely to continue into 2022.
There are remote signs that a combination of vaccines and/or anti-viral drugs will eventually arrest the spread of this infection, but we will have to face disruption in economic activity this year and the entertainment and hospitality industries will again bear the brunt of any downward trends in trade.
The Bank of England has confirmed that inflation is running ahead of targets and year on year to the end of November 2021, it was 5.1%. Expect increases in interest rates to come.
Prices will likely be volatile until inflation is reduced to more manageable levels and supply issues are resolved.
Many trades are still starved of appropriate labour, including the NHS. This may create conditions for wage inflation as employers vie for suitable applicants.
Which is shaping up as just a few challenges ahead for business owners in 2022.
What to do?
As the title of this post suggests, planning and being prepared is a sensible option. Burying your head in the sand may do more than restrict your vision. At a minimum you should:
- Prepare a budget for 2022 and monitor your actual results against these forecasts.
- Be prepared to flex your budgets if your situation changes.
- Each month extend your budget projections, so you are always looking at trading expectation twelve months ahead.
- Take remedial action sooner rather than later if the numbers highlight possible challenges. For example, if cash flow dips and you will need funding to bridge the gap.
- If you have resisted the use of cloud accounting software to this point in time, speak to us as a matter of urgency. Having real time data available to you at the click of a mouse is a must-have resource in these difficult times. The software we recommend would also accommodate your budgets and provide reports that compare actual results with forecasts.
And finally, discuss your results with us. We can help you choose your best options to weather any inconveniences that circumstance may throw at us. If we have learnt anything from past years of disruption, is that its prudent to expect the unexpected, plan for the worst and hope for the best.